California and the West

Univision to Cut Payroll Despite Increased Profit

Spanish-language media giant Univision Communications Inc. said Wednesday that it would cut its workforce by nearly 6% -- about 275 people.

The Century City-based company, controlled by billionaire A. Jerrold Perenchio, disclosed the layoffs as it released its third-quarter earnings: up 8% thanks to improved advertising sales.

Net income was $79.2 million, or 23 cents a share, compared with $73.4 million, or 21 cents, a year earlier.

The results beat a profit estimate of 22 cents a share by analysts polled by Thomson Financial. The profit report was released after the markets closed.

Univision shares rose 79 cents Wednesday to $27.46 and moved up to $28 in after-hours trading.

Third-quarter revenue increased 4% to $497.5 million, up from $477.4 million last year. Revenue from its TV networks -- Univision, TeleFutura and Galavision -- was $343.3 million, up from $328.1 million a year ago.

Most of the layoffs will be in its television unit, which is primarily based in Miami. The company, which will take a $25-million charge in the fourth quarter for severance packages, said a smaller workforce should result in $50 million in annual savings.

President Ray Rodriguez also announced that Univision had secured the U.S. Spanish-language broadcast rights for the 2010 and 2014 World Cup soccer tournaments. Univision edged out rival Telemundo, which is owned by NBC Universal.

Univision has suffered this year amid a soft ad market and acrimony in its boardroom. Its vice chairman, Emilio Azcarraga Jean of Grupo Televisa of Mexico, resigned last spring over management disagreements.

But Leland Westerfield, media analyst with Harris Nesbitt, called the earnings impressive and noted that early sales of $180 million for advertising in next year's World Cup were ahead of expectations.

"Ray Rodriguez is making his imprint with improved efficiencies and greater audience delivery, deflecting some of his critics from Latin America," Westerfield said.

Rodriguez also said Univision ranked second among all U.S. broadcast networks in prime time during the summer among people 18 to 34, drawing more young adults than CBS, ABC or NBC. Fox Broadcasting was the top-rated network in the 18-to-34 demographic.

"Who would ever have believed that the No. 2 network in the United States would be a Spanish-language network?" Rodriguez said.

Univision also said it would buy back an additional $500 million worth of shares. It completed a separate $500-million share repurchase in October.